It looks like two of my story lines have crossed. According to one of my law enforcement sources, county commissioners in Robertson County, Texas (a.k.a. “Booger County”) were allowed to purchase stock in CopSync, Inc. at a private sale shortly before they voted on a contract with the company. And one of the major investors in that company is none other than Texas Attorney General Kenneth “Righteous Ken” Paxton.
Righteous Ken, meet the Booger County Mafia.
On its website, CopSync claims that it contracts with more than 500 local law enforcement agencies to help them integrate information among themselves and outside agencies. A letter that I received from the company suggests that private stock offerings to government decision makers may have been a common practice. If so, a lot of people could be in a lot of trouble.
Here’s the original email that I received from my source, a former law enforcement officer in Robertson County:
I’m not sure if you heard this before but I was told today by an elected official (buddy) that there were several elected officials in the basement of the Robertson County Courthouse for a meeting just prior to Robertson County purchasing the Copsync equipment. The meeting included all Commissioners, Constables, and the Treasurer and her husband (maybe more elected but I didn’t pry). All were offered stock in the company in which all did purchase (including Constable Angele and his mother in law (she was not present)). I was told Jan Roe had her own private meeting later to purchase at a different time in private. The stock was offered for $.10 a share. (my source stated it was worth more at the time). I’m not familiar with the stock market or any rules however it sounds pretty fishy to me?
Let me know if this helps or if I need to dig further for information.
For the record, my source did purchase stock that day and is a Constable.
As my regular readers know, Jan Roe is the former Robertson County Judge, the current county chair of the Democratic Party, and a ringleader of the Booger County Mafia. What they may not know is that Ms. Roe took a job with CopSync shortly after she lost her race for reelection in 2014.
Yesterday morning, I tried to reach Robertson County Judge Charles Ellison, County Treasurer Melinda Turner, and all four county commissioners with four questions:
If you bought shares, how many did you buy and at what price?
Did Jan Roe arrange the sale, or did someone else?
Were other county officials present during the private offering and, if so, who were they?
Have you been interviewed by any law enforcement officials regarding the stock purchase?
I sent emails and/or faxes to Judge Ellison, Ms. Turner, and three of the four commissioners yesterday morning, but none of them responded. [UPDATE 1/09/2017 @ 1:10 p.m.: In a letter, Judge Ellison said he has never owned any CopSync stock and was not aware of the private offering]. According to the Texas Supreme Court, their silence could be used as evidence against them: “If one has remained silent, where if the situation had been as he alleges, it would have been natural and usual for him to speak, this circumstance may be proved against him as an admission.” Texas Gen. Indem. Co. v. Scott, 152 Tex. 1, 7, 253 S.W.2d 651, 655 (1952). Then again, a few grand jury subpoenas could determine once and for all whether the commissioners bought stock at a private sale.
I also sent a fax and an email to Robertson County DA Coty Siegert yesterday, asking (1) whether he had purchased any stock at the private sale, and (2) whether his office was investigating. In an email yesterday morning, Mr. Siegert said he had never purchased stock in the company and that he first heard about the private sale from me. He did not say whether his office is investigating. (Since Mr. Siegert has joined the Booger County Mafia, however, and since the commissioners determine his budget, I suspect he will try to bury the issue).
CopSync has been a little more forthcoming, but only a little. On December 13, 2016, I faxed a letter to CEO Ronald Woessner and included the text of the email above, suggesting that his company might need to notify the the U.S. Securities and Exchange Commission about the circumstances of the private sale. In a December 23, 2016 response, Mr. Woessner did not deny that the private sale had occurred, but he suggested that any such sale would not violate the regulations of the U.S. Securities and Exchange Commission. He also argued that because the company’s stock value had declined since the time of purchase, the private sale “conferred no untoward economic benefit” on the purchasers. In other words, Mr. Woessner argued that nobody made a profit, therefore nobody was bribed.
I didn’t find that argument very convincing, but I’m just a lowly civil rights lawyer with a blog, so I decided to consult my friend and Stanford Law School classmate Kate Litvak, who is now a professor of law at Northwestern University (she’s also a lot smarter than I am). Kate said Mr. Woessner is likely correct about SEC regulations, but the government might have other ways of going after a company that offered a special deal to local decision makers, e.g., bribery charges.
Under Texas law, for example, the prosecution need not prove that the offeror of a bribe conferred a net benefit to the recipient. See State v. Rivera, 42 S.W.3d 323, 329 (Tex. App.—El Paso 2001, pet. ref’d)(“Value of property or benefits… is not an element of the underlying offense of bribery…”). And under the state’s illegal gift statute, the prosecution does not even have to prove a quid pro quo, only that a gift or benefit was offered to a public official, and that the public official was in a position to decide something of interest to the offeror. Under federal law, county officials who purchased stock at a real or perceived discount might be charged with honest services fraud under 18 U.S.C. § 1346.
If nothing else, I believe the commissioners and the county judge could be charged with accepting an illegal gift if they participated in a private stock sale, particularly if they were told that they were getting a special discount on the stock.
RIGHTEOUS KEN AND COMPANY
I first learned about CopSync in 2015 when a fellow blogger, Lewis McClain, told me that Righteous Ken was a major investor. Around the same time, I learned that Jan Roe had taken a job with the company, and those two facts were more than enough to raise my eyebrows.
As I mentioned previously, Ms. Roe (a.k.a. “Mags Bennett”) is a key player in the Booger County Mafia. Righteous Ken, meanwhile, was indicted for three securities violations just months after taking office as attorney general. Two of those charges were for securities fraud, and that’s where things get interesting.
Righteous Ken’s two alleged victims, Texas State Representative Byron Cook (R-Corsicana) and investor Joel Hochberg of Florida, allege that Righteous Ken duped them into buying stock in a company (Servergy, Inc.) without revealing that he would get shares for selling it to them. According to SEC records, two of CopSync’s other major investors are none other than Byron Cook and Joel Hochberg.
There’s no reason at this point to believe that Rep. Cook, Mr. Hochberg, or Righteous Ken knew anything about private stock offerings to government officials, but Righteous Ken sure seems to have an affinity for shady business deals. If I had any stock in CopSync, I would sell it in a hurry. A potential bribery scheme is reason enough, but Lewis McLain identified other red flags in his October 16, 2016 blog post.
ANOTHER SLEAZY SCHEME IN BOOGER COUNTY
On December 28, 2016, I reported that Hearne City Attorney George Hyde and Assistant City Attorney Sarah Griffin resigned abruptly after I questioned their handling of a recall petition against my client, City Councilman Rodrick Jackson. Later that evening, Mr. Hyde issued a statement to the media and tried to deflect blame to the city council by alleging that they made his job impossible.
Since then, the truth has been leaking out of city hall, and Mr. Hyde and Ms. Griffin are looking worse than ever. I had already reported that their firm billed the city more than $29,000 for a two month period, but on Tuesday city council members learned that the latest bill was for more than $43,000 over a two-month period.
By comparison, former City Attorney Bryan F. “Rusty” Russ, Jr. had only charged the city about $4,500 per month, and even that was more than twice the average for cities of a comparable size. In my estimation, Ms. Hyde and Ms. Griffin charged the city more than ten times what their services were actually worth, and that’s assuming that their services are actually worth the hourly rates that they charge.
And I do not believe that their services are worth the hourly rate that they charge because, frankly, they appear to be incompetent. According to Councilman Jackson and Councilwoman Shirley Harris, billing records show that the law firm gave Interim City Manager John Naron (a.k.a. “Boy Wonder”) advice on how to remove them from the city council via recall elections. That’s bad enough, but the firm charged the city for that advice, and Mr. Naron paid the bill before the city council had an opportunity to review the bill and authorize payment. In other words, it appears that Boy Wonder used taxpayer funds for political purposes, namely to pay for advice on getting rid of his enemies on the council.
If that’s the case, then Boy Wonder could be charged with misapplication of fiduciary property just like his predecessor, former city manager Pee Wee Drake. For that matter, Mr. Hyde and Ms. Griffin might also be charged as principals or accessories, and that’s just the beginning of their potential problems. They could face bar grievances or even a civil lawsuit for breach of fiduciary duty.
You may also recall that Councilman Jackson had requested copies of all correspondence among Boy Wonder, Mr. Hyde, and Ms. Griffin but, according to Councilman Jackson, Ms. Griffin tried to convince him that their communications would be protected by privilege. In other words, she tried to convince him that he had no right to see their emails. Without needing to consult with me, however, the councilman immediately and correctly pointed out that the city council was her client, not Boy Wonder.
Mr. Hyde’s and Ms. Griffin’s firm was hired on the recommendation of Boy Wonder, and the evidence keeps growing for what I’ve suspected all along: Boy Wonder hired the firm to represent his interests, even though the firm was legally obligated to represent the interests of the council, not Boy Wonder. It also appears that Boy Wonder allowed the firm to churn outrageous and unnecessary legal fees in exchange for helping him dupe and manipulate the council. Somebody could get disbarred for that.
REASON FOR OPTIMISM
This will shock most of my regular readers, but I’m optimistic about the future of Hearne and Robertson County. It’s easy to focus on all of the cronyism and corruption in city and county government, but another trend has gone largely unnoticed: the Booger County Mafia keeps corrupting candidates who originally ran as reformers (most notably District Attorney Coty Siegert), but the voters keep throwing the bums out every time they’re given the opportunity.
Consider, for example, the case of former city councilman Michael “Sticky Fingers” Werlinger, who was originally voted out of office back in 2014 following revelations that he used taxpayer money to buy college football tickets. He and two incumbents were defeated by three women who ran as reformers, namely Hazel Embra, Joyce Rattler, and LaShunda White.
About a year after they were elected, the three woman sold out and joined the Mafia. Ms. Embra was rewarded with an appointment as municipal judge, a paid position, and her salary as judge was quickly doubled to $40,000, even though she had no legal qualifications whatsoever, even though the judgeship is only a part-time position, and even though the 2013 median household income for Hearne was only $27,040 (the statewide average for 2013 was $51,704). The council then appointed Sticky Fingers back to the council to fill the vacancy created by Ms. Embra’s departure.
The voters of Hearne quickly got even. Last May, Sticky Fingers, Ms. Rattler, and Ms. White were thrown out of office even though, according to a subsequent indictment, Ms. Rattler had tampered with the election. If “Judge” Embra had been on the ballot, I’m sure she would have lost as well.
In 2016, Margaret Salvaggio ran as a reformer, then quickly switched her allegiance to the Mafia once she was elected. This does not worry me or my clients on the council, however, because we are confident that she will meet the same political fate as Sticky Fingers, Ms. Rattler, Ms. White, former county judge Jan Roe, and former DA John Paschall.
Yes, the Booger County Mafia is still clinging to life, but the voters keep sticking a knife in it every time they get the chance. Sooner or later, the voters are going to win.